Name: Why Olympic host cities always blow their budgets
Uploaded: 2021-03-23
Duration: 6 min 26 s
Description: The world's most expensive sporting event is ripe for reform.

The world's most expensive sporting event is ripe for reform.

Why Olympic host cities always blow their budgets

(Photo by Justin Setterfield/Getty Images)

International

The world's most expensive sporting event is ripe for reform

Olympic athletes from all over the road will gather in Tokyo this summer, fighting for glory and national pride. Hosting the Olympic Games is a source of national pride, too, but that owner comes with a huge price tag. The host of every Olympics, 1960 have exceeded their initial budgets by an average of 272% according to a University of Oxford study for the Summer Games. You need somewhere between 30 and 40 sports venues. You need an Olympic stadium, which hosts the the opening and the closing ceremonies and has usually has most of the track and field events. Then you need an Olympic Village. The Olympic Village is meant to accommodate the roughly 11,000 athletes and their trainers and coaches, which brings the total close to 16,000 people. And then you need an international broadcasting center because there are broadcasters, TV people and streaming companies, uh, that descend upon the Olympics and want to bring live video back to their home countries. That's also a major expense could easily easily run close to a billion dollars. The International Olympic Committee or the IOC announced in 2013 that Tokyo had won its bid to host the 2020 Summer Games. At that point, Japan said it will only cost them $7.5 billion. But by 2020 the official number from the Tokyo Olympics Organizing Committee went up to $15.4 billion 2.8 billion of which is associated with the one year delay due to Covid 19. Japanese government audits, however, said that costs much higher likely from 25 to $30 billion where you can get these big differences in official numbers versus unofficial numbers. One way it can be is you know what, actually, should you count as Olympic spending or not like Okay, we're building a very expensive new subway stop as part of our transit system, and it might be tempting to take that billion dollars off, saying, You know, this is it's part of our subways. That's not part of the Olympics again. If you're making something like airport improvements to handle all the additional traffic, it's hard to argue that that's something that general infrastructure costs when you're really building all of that excess capacity for 13 week event. Over half of Tokyo's Olympic budget is earmarked for spending on sporting venues. A lot of the venues that they call existing venues are venues that are old and not satisfactory to the IOC because they don't have proper amenities because they don't have club seats. They have luxury boxes they don't. They don't have catering possibilities there. Making sign of host city agreement that says you have to meet all of the requirements that we set and that if there's any cost overruns, you have to take full responsibility and the issue goes beyond infrastructure costs in order to construct 30 to 40 venues and in order to have the transportation routes leading to those venues opened up, you've got to push people out of the way there. There were in Beijing for 2000 and eight. Reportedly, there were over a million people who were evicted from their homes in order to do the construction for hosting the games, uh, at a lower level in Rio in in in 2000 and 16. Reportedly, there were 77,000, maybe La Luz, residents of shantytowns in Rio who were pushed out of their homes and in Rio. Many of them were relocated 10 and 15 miles out of the city, where they had very poor, UM, negligent public transportation facilities. So hosting the games can be a very disruptive event, socially and and business wise as well. All in all, it is important for a whole city to focus on long term planning. The fundamental problem here is an economic and environmental problem, because when you construct a permanent venue, you have to make sure that it's going to have use and economically justifiable use after the games. The sports infrastructure is probably the most dangerous that has the most risk of running over budget and then also on top of that, becoming a white elephant afterwards, making a state of the art subway or making a state of the art airport again may run your way over budget. But at least you have some hope of that. Paying off in the long run over budget sports facilities will never pay off. Both Matheson and Symbolic have ideas to make hosting the games less expensive. Rather than concentrating an entire Olympic Games in one city. Uh, you can have the Olympic Games spread out to a number of cities, so you know just because you know, Los Angeles itself may not have all the facilities, but if the Games were instead in Los Angeles and San Francisco and Seattle and Denver, then maybe you have enough facilities. If you have multiple cities all at once, it's silly economically, and it's silly environmentally, uh, to recreate the Olympic Shangri La in a different city every four years. What I would do is I probably picked an area between Olympus and Athens and Greece and build the Olympic Shangrila. They're just have permanent venues and picked a similar area, probably in the Alps in Europe for the for the Winter Games and just have it there all the time. It's not about to happen because the IOC likes all of the attention that it gets around selecting new cities. But I think it makes sense to talk about that as an option so that after enough time they'll be significant pressure coming from corporate sponsors and other places that might make them. If they don't go all the way to that extreme model, only one one place to host it. Maybe maybe they pick two or three places, which would be less less wasteful. Mhm